Looks Like Wal-Mart Has The Edge – But By How Much?

Although the questions were flying in both directions yesterday, as usual for the Supreme Court, the tone of the Justices’ interaction suggested that Wal-Mart has the edge over the plaintiffs. As others have reported, Justices Kennedy and Scalia were quite skeptical of the plaintiffs’ theory that store-by-store discretion could be characterized as a common policy subject to a class challenge. But the argument went well beyond that. Two particularly interesting items:

1. First, there seemed to be a confluence of concerns between the more and less conservative Justices over the question of due process. Several of the more conservative members expressed concern about the prospect that Wal-Mart would be denied the opportunity to present individual defenses to individual plaintiffs’ claims. That was interesting because the Justices granted certiorari on only two of the three questions Wal-Mart had presented, denying cert as to Wal-Mart’s due process argument. But it figured prominently yesterday.

The less conservative Justices also had concerns about the due process implications of the Ninth Circuit’s affirmance of the class, but from the perspective of absent class members. hundreds of thousands of whom would be chained to the named plaintiffs and this case (a theme then picked up, somewhat surprisingly, by Chief Justice Roberts). One wonders whether these due process concerns, though coming from different directions, might provide a unifying theme that dictates the outcome.

2. Justice Sotomayor suggested early on that perhaps the only real problem with the certified class was the presence of back pay claims, a point that Justice Ginsburg then echoed. Justice Sotomayor asked Wal-Mart’s counsel whether the class couldn’t be saved as a classic Rule 23(b)(2) class, by trimming out the back pay claims and allowing plaintiffs to pursue only injuctive and declaratory relief. Wal-Mart’s counsel, surprisingly, at first seemed to endorse the idea, before recovering and pointing to lingering issues about the adequacy and typicality of the named class members and their claims.

Other members of the Court seemed less interested in this latter idea, and it may be that the perceived lack of a single, centralized, common policy will be enough to provoke a complete reversal of the Ninth Circuit and decertification of the class. But Justice Sotomayor’s compromise suggestion seemed of interest to several members, and might turn out to be popular enough to limit the scope of the Court’s decision.

The bottom line: outright victory for the plaintiffs seems highly unlikely, but we will have to wait to see whether Wal-Mart wins a complete victory, or only half of one.

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